Johnson Const. Co. v. Austin

• Decision Date: 22 October 1927
• Docket Number: No. 5295.,5295.
• Parties: JOHNSON CONST. CO. v. AUSTIN et al.
• Court: North Dakota Supreme Court

55 N.D. 905

215 N.W. 484

JOHNSON CONST. CO.

v.AUSTIN et al.

No. 5295.

Supreme Court of North Dakota.

July 13, 1927.

Rehearing Denied Oct. 22, 1927.

Syllabus by the Court.

Though time be not of the essence of a contract for the conveyance of real property, the time element may nevertheless be so material that a court of equity cannot properly decree specific performance after a protracted delay.

The party responsible for a substantial delay in the performance of a contract, where time is material, must, to be entitled to specific performance, account for and explain the delay by showing facts and circumstances which are sufficient to justify and excuse it. Held, in the instant case, that a delay of more than two and one-half years is not justified or excused.

The intention of the parties to a bond for deed is determined by the same rules of interpretation as are applied to other contracts.

In the absence of a provision for stipulated damages or of an indication that the sum named as penalty is agreed upon as damages, the measure of recovery upon a bond is the actual damage sustained not exceeding the penalty.

Appeal from District Court, Cass County; Chas. M. Cooley, Judge.

Action by the Johnson Construction Company against Belle Austin and others. From a judgment of dismissal, plaintiff appeals. Reversed and remanded.A. R. Bergesen and Conmy, Young & Burnett, all of Fargo, for appellant.

Richardson, Green & Wattam, of Fargo, for respondents.

BIRDZELL, C. J.

On or about July 1, 1923, the plaintiff and defendants entered into a contract whereby the latter were to purchase from the former certain residence property in the city of Fargo at an agreed price of $8,000, payable as follows: Cash, $1,000, the conveyance of a quarter section of land in Stutsman county at an agreed valuation of $4,000 to be conveyed by warranty deed, free of incumbrances, and by the assumption of a $3,000 mortgage then outstanding against the property purchased. Following the making of this contract abstracts of title were exchanged, and upon examination it appeared that there were certain objections to the title of the defendants to the Stutsman county land. Notwithstanding, the vendors executed a deed to the purchasers of the residence property, who went into possession, executing, however, under date of August 4, 1923, a bond for a deed to the land in the sum of $4,000. The condition of the bond recited the obligation of the Austins under the contract to convey the Stutsman county land, and further recited that the consideration for the transfer had been paid in full by the obligee, and that the obligors had agreed to loan the obligee upon the land $2,000 on or before August 31, 1923, the condition being that, “if the said obligors shall make to the said obligee the said loan of $2,000 as provided herein, and shall deliver to the said obligee a good and sufficient deed as aforesaid on or before January 1, 1924, then this obligation shall be void; otherwise it shall be and remain in full force and virtue.” (The original contract had provided for the delivery of deeds by both parties to be left in escrow in the Merchants' National Bank of Fargo, so that the deal might be closed on August 1, 1923.) Following the execution of the bond the loan of $2,000 was made, and a partial release of the bond evidencing this fact was executed under date of August 7, 1923. In April, 1924, this action was begun by the plaintiff as obligee in the bond, seeking to recover $2,000, with interest from January 1st, as the balance due the plaintiff for the purchase price of the residence property transferred, and further seeking the cancellation of the note and mortgage executed by the plaintiff to evidence the loan made to it by the Austins on the security of the Stutsman county land; it being assumed that, upon the recovery by the plaintiff in the action, the title to the land would remain in the defendants. The defendants answered, alleging, specifically, the tender on or before January 1st of a good and sufficient warranty deed conveying the land to the plaintiff, and, generally, compliance with the terms and conditions of the contract.

The facts were stipulated and the cause submitted to the trial court without a jury. In addition to the facts above stated, the stipulation shows that certain of the objections to the title of the Stutsman county property were removed before the 1st of January, 1924, and that, for the purpose of removing other objections, an action had been commenced by the Austins on or about October 18, 1923, to quiet title. The published summons in the action was headed “State of North Dakota, County of Cass,” and in the body of the summons the defendants were required to answer a complaint to be filed in the office of the clerk of the district court of Stutsman county. The defendants are described as follows: “J. J. Delaney, one McGuire, whose first name is unknown, and all other persons unknown claiming any estate or interest in, or lien or incumbrance upon, the property described in the complaint.” It appears that the second objection to the title is based upon the fact that a mortgage shown in the abstract referred to a contract for deed by a former owner to one McGuire. The contract had never been recorded. It was stipulated, however, that the contract running from such former owner to Martin C. McGuire was in the possession of W. D. Austin on or about October 18, 1923, when the action to quiet title was begun, but that such fact was not known to his attorneys until the trial of the action to quiet title. It was also stipulated that the former owner, who entered into the contract with McGuire, would, if called as a witness, testify that the contract had been rescinded upon McGuire's solicitation; that the latter had abandoned all claim arising thereon, and had never been in possession of the land.

The Austins have at all times been able and willing to deliver to the plaintiff the actual possession of the Stutsman county land, and on December 31, 1923, they executed a warranty deed, and delivered the same to the Merchants' National Bank of Fargo, subject to plaintiff's order, notifying it thereof. The plaintiff refused to accept the deed, and on January 29th served notice of its refusal, and demanded payment under the bond. On the...